Display:
Now that markets are arbitraged, a dividend is equivalent to a stock buyback, since the company's valuation decreases by the dividends it gives, right ?

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Thu May 22nd, 2008 at 12:27:30 PM EST
[ Parent ]
I think you're right, in which case out the window goes "fundamental analysis".

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Thu May 22nd, 2008 at 12:43:18 PM EST
[ Parent ]
Prices are a social construct and like all social constructs are deeply influenced by PR...

Un roi sans divertissement est un homme plein de misères
by linca (antonin POINT lucas AROBASE gmail.com) on Thu May 22nd, 2008 at 12:47:01 PM EST
[ Parent ]
Companies' assets decrease when dividends are paid by the amount of the dividend. And there is always a hiccup in pricing for a couple of days when a share goes from being "cum dividend" to "ex dividend".

But in the short, medium and long term the price reflects  investors' expectations of net income=profits, and whether or not this is paid out in dividends is not generally more than a tax issue.

"Any economic unit can emit money. The serious problem is to get it accepted" Hyman Minsky

by ChrisCook (cojockathotmaildotcom) on Thu May 22nd, 2008 at 01:35:42 PM EST
[ Parent ]

Display:
Login
. Make a new account
. Reset password
Recommended Diaries
Clipping the wings of a judge
by Migeru - Feb 10
31 comments

Hunger March wins PR battle
by DoDo - Feb 9
3 comments

Romania: protests change government
by DoDo - Feb 8
6 comments

Sarkozy: Enemies Ahoy!
by afew - Feb 10
15 comments

Murdoch - Outsourcing and Hubris
by ceebs - Feb 3
18 comments

Obama wins GOP Primaries (to date)
by Frank Schnittger - Feb 8
8 comments

LQD: Unsustainable irrigation
by Melanchthon - Feb 9

Bristol Pound
by ChrisCook - Feb 7
14 comments

Recent Diaries
Sarkozy: Enemies Ahoy!
by afew - Feb 10
15 comments

Clipping the wings of a judge
by Migeru - Feb 10
31 comments

LQD: Unsustainable irrigation
by Melanchthon - Feb 9

Hunger March wins PR battle
by DoDo - Feb 9
3 comments

Obama wins GOP Primaries (to date)
by Frank Schnittger - Feb 8
8 comments

Romania: protests change government
by DoDo - Feb 8
6 comments

Answers to the Renewable Energy Consultation
by Luis de Sousa - Feb 7

Bristol Pound
by ChrisCook - Feb 7
14 comments

The Imitation Of Germany
by afew - Feb 4
31 comments

Strange Fruit
by Frank Schnittger - Feb 4
14 comments

Murdoch - Outsourcing and Hubris
by ceebs - Feb 3
18 comments

Mismatch with the Natural Gas Market
by Luis de Sousa - Feb 3
22 comments

The Future of Economics
by ARGeezer - Feb 2
191 comments

Desert Island Discs - Helen's distortions
by Helen - Jan 31
48 comments

Gorila
by DoDo - Jan 29
14 comments

Rail News Blogging #7
by DoDo - Jan 29
15 comments

Obama's State Of The Union: LQD
by Crazy Horse - Jan 25
74 comments

Democracy Technology
by gmoke - Jan 24
1 comment

The Hydrogen dream
by Luis de Sousa - Jan 24
49 comments

ET Paris Meet-Up 2012 (2 UPDATE)
by afew - Jan 23
113 comments

More Diaries...
Occasional Series